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Financial Sustainability and Outreach of MFIs in Ethiopia: Does Ownership Form Matter?

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Microfinance Institutions

Part of the book series: Palgrave Studies in Impact Finance ((SIF))

Abstract

The way ownership is organized and its effects on social and economic performance have been at the centre of policy discussions in microfinance (Mersland, 2009; Mersland and Strøm, 2009). Over the last decades, shareholder-owned microfinance institutions have been promoted as an efficient ownership form over non-government and member-owned microfinance providers (Pischke, 1996; Armendáriz and Morduch, 2010). Proponents of the financial systems approach, in particular, subscribe to policies that entail the transformation of nongovernment and member-owned microfinance institutions into shareholder firms (Christen, 2001; Fernando, 2004; Rhyne and Otero, 2006; Frank, 2008). The rationale is that private ownership in microfinance can act as an external control mechanism or corporate governance system that can curb excess costs and attract commercial funds and deposits, which may improve efficiency and expand outreach to the poor (Christen, 2001).

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Authors
  1. Gashaw Tadesse Abate
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  2. Carlo Borzaga
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  3. Kindie Getnet
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Editor information

Editors and Affiliations

  1. University of Agder, Norway

    Roy Mersland

  2. Oslo and Akershus University College and Telemark University College, Norway

    R. Øystein Strøm

Copyright information

© 2014 Gashaw Tadesse Abate, Carlo Borzaga, and Kindie Getnet

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Abate, G.T., Borzaga, C., Getnet, K. (2014). Financial Sustainability and Outreach of MFIs in Ethiopia: Does Ownership Form Matter?. In: Mersland, R., Strøm, R.Ø. (eds) Microfinance Institutions. Palgrave Studies in Impact Finance. Palgrave Macmillan, London. https://doi.org/10.1057/9781137399663_13

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